Car makers on track for annual record in 2016

AnneSteele

Auto makers rolled out stronger-than-expected December U.S. sales results Wednesday, amid robust demand for trucks and hefty year-end incentives, signaling the industry remained on track to set an annual record in 2016.

General Motors Co. logged a 10% rise in U.S. auto sales in the month to 319,108. The company said retail sales rose more than 3% to 249,983 vehicles -- its best performance in a decade.

Ford Motor Co.'s sales edged 0.1% higher to 237,785. Retail sales gained 5% to 183,454 vehicles for the company's best December since 2004. Ford said sales of its F-Series pickups posted their best month in 11 years.

U.S. light-vehicle sales in 2016 are expected to have slightly edged out a record set last year, according to a J.D. Power forecast, largely owing to high incentive levels that helped prop up retail sales.

Analysts expect about 17.4 million to 17.5 million vehicles were sold in 2016, which would put the year at similar levels compared with last year's record of 17.5 million units.

Retail sales, which strip out sales to fleet buyers, are expected to reach 14.1 million units for the year, a 1.2% decline from 14.2 million units in 2015.

"This year will be remembered for strong retail sales and record transaction prices," said Deirdre Borrego, general manager of J.D. Power's automotive data and analytics. "However, elevated inventories, a slow model-year transition and record incentive levels point to the challenges the industry will face in 2017."

Ms. Borrego said December, a month that typically delivers the highest incentive spending of the year, is expected to have exceeded the record set in November of an average of more than $4,000 per unit.

While December sales were tracking to finish lower than last year, dealers and auto makers were hustling to squeeze out just enough units for an annual record, said Edmunds.com analyst Jeremy Acevedo.

U.S. light-vehicle sales are expected to drop 2.2% in December compared with last year, according to J.D. Power. The month had one fewer selling day than in December 2015. On a selling-days-adjusted basis, sales are expected to increase 1.4%.

Trucks are forecast to account for 64% of December's volume, a record for any month, according to WardsAuto.com. That helped push the estimated average transaction price for light vehicles in the U.S. to $35,309, a record high, according to Kelley Blue Book. New-car prices have increased by $521 -- or 1.5% -- from December 2015, thanks to a shift in consumer demand from cars to pricier crossovers, trucks and SUVs.

Ms. Borrego said in 2017, auto makers will have to "maintain production and pricing discipline to achieve profitability." Experts say a high number of lease maturities will drive sales over the next year, although a steeper interest rate and potentially lower incentive levels could damp sales.

Write to Anne Steele at Anne.Steele@wsj.com and Adrienne Roberts at Adrienne.Roberts@wsj.com

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.